Loan Software - How to Select it for a Bank

Hal Singer May 24, 2011 — 1,158 views

The banking industry is changing very rapidly. Banks of all sizes are implementing technologies to meet the needs of their customers. As banking becomes more and more advanced, new capabilities are being added: advanced check deposits, banking via cell phones, just to name a few.

What technologies are available today to help banks operate more efficiently and reduce risk?

One of the most important and immediate priorities for banks is the implementation of effective loan software, especially in light of recent lending controversies.

Implementing dynamic loan software to scan and manage loan documents is one of the most affordable investments a bank can make to enhance bank work-flows.

What should a bank look for in a loan software solution?

Below are some of the key features that your bank should consider when making decisions relating to loan software implementation:

1) The first question that you should ask yourself is:

Does this 'loan software' offer loan document imaging? This is an important question, because banks have to keep records of all loans and related documents. How do you expect to effectively manage such a huge pile of documents? Of course the answer should be your loan software. For this to happen in an efficient way, your loan software should be capable of imaging the loan documents and then storing them in a digital format to be retrieved later.

2) Secondly 'loan software' should be modular in nature. This will allow you to implement only those solutions that fit your needs, as compared to implementing a complete suite of products that may remain largely unused.

3) Loan software should also have the capability to store, archive, and report on all past loan documents.

4) It should also allow you to export certain files/features, which can make audit preparation easy for your bank.

5) It should also adapt to your existing core system, so that you don't have to change existing infrastructure.

6) A loan software platform also must have a variety of security options to allow certain files to be accessed by only authorized persons.

Another important element that you should be looking for is best-in-class "customer support". Does the vendor offer you continuous support?

One feature that is sometimes overlooked by banks is the effect of 'document imaging' on audit preparation activities. Historically, audit preparation had been a very complex task. In the past, audit preparation could take days of hard work and labor. This may involve document preparation, copying of documents, and document sorting. A 'loan software" tool can make this task very easy through the implementation of document imaging. This feature allows banks to prepare for audits in less than hour or so.

Perhaps the most important factor for the consideration of small banks is to find loan software that fits a bank's financial constraints. A modular approach is especially beneficial for these types of banks. As with any decision, the immediate impact to bottom line metrics plays an important role in the evaluation process.